Collusion in Markets with Imperfect Price Information on Both Sides
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Collusion in Markets with Imperfect Price Information on Both Sides. / Schultz, Christian.
I: Review of Industrial Organization, Bind 50, Nr. 3, 05.2017, s. 287-301.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Collusion in Markets with Imperfect Price Information on Both Sides
AU - Schultz, Christian
PY - 2017/5
Y1 - 2017/5
N2 - The paper considers tacit collusion in markets that are not fully transparent on both sides. Consumers only detect prices with some probability before deciding which firm to purchase from, and each firm only detects the other firm’s price with some probability. Increasing transparency on the producer side facilitates collusion, while increasing transparency on the consumer side makes collusion more difficult. Conditions are given under which increases in a common factor that affects transparency positively on both sides are pro-competitive. With two standard information technologies, this holds when firms are easier to inform than are consumers.
AB - The paper considers tacit collusion in markets that are not fully transparent on both sides. Consumers only detect prices with some probability before deciding which firm to purchase from, and each firm only detects the other firm’s price with some probability. Increasing transparency on the producer side facilitates collusion, while increasing transparency on the consumer side makes collusion more difficult. Conditions are given under which increases in a common factor that affects transparency positively on both sides are pro-competitive. With two standard information technologies, this holds when firms are easier to inform than are consumers.
KW - Faculty of Social Sciences
KW - Transparency
KW - Tacit collusion
KW - Cartel theory
KW - Competition policy
KW - Internet
KW - L13
KW - L40
U2 - 10.1007/s11151-016-9539-7
DO - 10.1007/s11151-016-9539-7
M3 - Journal article
VL - 50
SP - 287
EP - 301
JO - Review of Industrial Organization
JF - Review of Industrial Organization
SN - 0889-938X
IS - 3
ER -
ID: 178696704